GraphCard Offers Online Payment Solutions To Africa

March 20th, 2006

Within a span of fifteen years since its widespread introduction, the Internet has radically changed the face of the world. The number of Internet users on the African continent is currently estimated to number almost 23 million. Globally, the number of Internet users exceeds 1 billion – representing approximately one-sixth of the world’s population – and tens of thousands of new users are being added daily.

The Internet has fundamentally changed the way in which modern society exchange information and ideas. But it has also dramatically altered the way in which trade is conducted. With a series of computer mouse clicks, millions of e-commerce transactions are executed, each with blinding speed. For small merchants and large International retailers alike, the Internet is becoming an increasingly important part of their business models, and those companies who have not yet entered the Information Superhighway are now scrambling to get up to speed.

Growing Markets with Growing Frustrations

Industry experts estimate that approximately 90% of all Online purchase made today involve the use of credit cards. Yet, for one-third of all Internet users – particularly those in the developing nations of Africa – the lack of accessibility of credit cards poses significant barriers to engaging in e-commerce. To complicate matters, widespread incidences of fraud and criminal activity involving credit cards have caused many consumers to be wary of disclosing personal information Online.

Many African financial institutions currently issue debit cards that are affiliated with major International payment networks such as MasterCard and Visa. However, issuing banks often fail to inform cardholders that even though their bank accounts may be properly funded, their debit cards may not be accepted for Online transaction. In recent months, many consumers have attempted to make Online purchases with debit cards, only to learn that their transactions have been rejected by a merchant or a payment processor because the card holders reside in a country or region that has been placed on a “watch-list” for potential fraudulent activity. Unfortunately, this practice has resulted in may well-meaning and law-abiding African citizens being victimized by prejudice. Furthermore, this practice serves to restrain Africans from enjoying the economic prosperity they rightfully deserve.

Other third party payment processors such as eBay’s PayPAl and Google’s Gbuy have made significant progress in capturing market share for Online payments – particularly in the United States – and continue to seek new consumers. However, these companies continue to rely predominantly on the use of credit cards to function. As a result, millions of consumers around the world without credit cards – but significant disposable incomes – are unable to make Online purchases, severely restricting commerce and closing of entire markets.

A Solution Is Born

One U.S.-based company has set out specifically to meet the needs of Online shoppers who have limited access to traditional means of payment such as credit cards. The solution is known as “GraphCard” - a revolutionary Online payment system designed exclusively for use in e-commerce applications. Available to Internet users in over 260 countries, GraphCard employs “virtual” prepaid cards that can be easily used to make Online payments. The virtual nature of GraphCard eliminates the expense and security risks involved in shipping tangible plastic cards to users. Instead, card holders simply fund their accounts in advance through a variety of means, including purchasing credit through a partner-reseller, personal checks, electronic fund transfers from checking or saving accounts, Western Union wire transfers or money orders. Once their GraphCard account has been sufficiently funded, the consumer can then initiate Online purchases without the need for a credit card.

GraphCard Fosters Financial Equality

Unlike bank-issued credit card and debit cards – which are typically available only to individuals with well-documented credit histories or significant financial means – GraphCard is available to all consumers. The only prerequisite is a consumer’s ability to fund their GraphCard account in advance of making Online purchases.

In short, GraphCard offers shoppers the flexibility of a prepaid spending card for Online purchases without the hassles normally encountered with bank-issued credit and debit cards. The powerful result is that a consumer in Abuja can now easily make Online purchase from a merchant in London without worrying about experiencing prejudice on credit-related matters. A business owner in Casablanca can quickly order and pay for inventory from a manufacturer in Singapore without fear of the transaction being rejected by an issuing bank or an intermediary payment processor. Whatever payment methods demanded by an Online merchants, GraphCard members are equipped to meet the demand of such merchants. By eliminating age-old credit barriers, GraphCard has opened up a world of new possibilities by facilitating the exchange of goods and services, bolstering local economies and improving the quality of life for many Africans With the exception of a small group of countries, GraphCard is able to transact Online payments between any two parties around the world.

Merchants Gain Access to New Markets

Merchants can also greatly increase their potential customer base by choosing to accept GraphCard payments at their Online establishment. For a low, one-time activation fee of just USD $45 – a cost which is well below the expense of joining most other Online payment processing networks – a merchant can enroll in the GraphCard merchant network and begin accepting payments on their website.

A frequent concern for merchants who accept Online payment is an expense known as “chargeback” in which the merchants must pay for items that have been disputed by a customer. According to MasterCard International Inc., 60% of all e-commerce chargebacks occur in situations where a credit card holder denies making the purchase. Graphcard’s unique, secure system significantly reduces expensive chargebacks resulting from unauthorized transactions, greatly decreasing risk to the merchant. GraphCard users and merchants also receive added protection with industry-standard Secure Sockets Layer (SSL) technology which safeguards all customer information transmitted GraphCard’s Servers. For efficiency, customer service issues are handled primarily through e-mail, though telephone customer service always remains available as a back-up.

In the event that a specific merchant cannot accept an Online payment for a transaction, GraphCard offers the ability to issue a certified check or money order on behalf of the buyer. This feature provides the ultimate in flexibility for Online shoppers and merchants.

Key benefits for issuing banks

Convert cash to card spending
Reduce customer service costs with Online self-care
successfully extend card usage to small payment and micro payments
Incorporate small transactions into emerging payment efforts

Problem

The multivariate obstacles preventing smooth Online transactions originating from most African countries may not go away by simply issuing debit cards to users. An integrated and tested solution offering multiple and flexible payment options has to be highly successful among users. Financial institutions without good understanding of Online payment systems will continue to lose market share to alternative payment system.

Solution

GraphCard is tightly integrated with most payment instruments accepted by merchants for micro payments.

Benefits to issuers:

By integrating with local debit cards, a unique opportunity would be created, increasing card usage and revenue.
Loyalty and reward programs fro small payments aid customer retention.
Ability to offer increased convenience to consumers fro small transactions.
Frequent use for everyday purchase will increase revenue.
Online consumer self-care offers can support everyday spending.

A company committed to success.

GraphCard was founded in 2003 as a wholly-owned unit of Laurel Maryland-based LFR Communications Inc. The company’s founder, Peter Ojo, is himself an immigrant from Africa, and has in-depth, first-hand knowledge of the problems surrounding online payments in developing countries. Graphcard is one of the few enterprises to receive assistance from the prestigious Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business, located in College Park, Maryland. The University’s Dingman center carefully screens hundreds of potential business models each year and provides strategic counsel only to those which demonstrate the best fiscal potential.

Since commencing operations, GraphCard has successfully handled thousands of domestic and international transactions, and continues to gain widespread acceptance in new markets. The company’s management team is committed to removing barriers that restrict consumers from participating in the thriving Internet economy, and is optimistic about GraphCard’s potential to become a well-known brand worldwide.

The company has aggressive growth plans for 2006 and beyond. Consumers and merchants can learn more about GraphCard by visiting www.graphcard.com Email: info@graphcard.net

Entry Filed under: Online Payment Systems